The EURUSD is stabilizing near the week’s highest point, trading above the 50% midpoint. It started to rise last Friday, supported by the 100-day moving average, which helped buyers gain strength. The pair continued its upward movement by crossing above the 200-hour moving average and the 38.2% retracement from July’s peak, climbing above the 50% midpoint at 1.16098. On Thursday, EURUSD approached 1.1700, a resistance level, before retreating to retest the 50% retracement. Buyers held firm above this level, keeping the bullish trend alive. Although Friday’s high didn’t exceed Thursday’s, the higher low maintained buyer interest and set the stage for an important test early next week.

Technical Levels

– If the price falls below the 100-hour moving average (1.16156) and the 50% retracement (1.16098), it would signal a downward trend. – Conversely, if it stays above these levels and breaks the 61.8% retracement at 1.16815, a retest of 1.1700 could occur, aiming for July highs at 1.1787 and 1.18289 as targets for bulls. The EURUSD is currently holding above the important support level of 1.16098. This 50% midpoint acts as a new base for buyers, and maintaining it is crucial for keeping the bullish trend from last week. The key challenge ahead is pushing past Thursday’s highs, just below the 1.1700 resistance.

Trading Strategy

Traders who are bullish should think about buying call options with strike prices above 1.1700. A sustained move above the 61.8% retracement level at 1.16815 would trigger this strategy. If that barrier is overcome, it could lead toward the July highs near 1.1787. This technical strength is backed by recent fundamental changes. The US jobs report for July, released last Friday, reported Non-Farm Payrolls at a disappointing 150,000, which weakened the dollar. Meanwhile, the latest Eurozone flash CPI estimate showed core inflation steady at 2.9%, suggesting that the European Central Bank may not lower rates as soon as expected. However, we must keep a close eye on the 100-hour moving average at 1.16156. A drop below this level and the 1.16098 support would indicate that recent buying pressure is fading. At that point, it may be wise to consider buying put options to hedge or speculate on a decline. This divergence in policies reminds us of the market patterns from late 2023, which led to a significant rally in the Euro. Historical data from that time showed that when a trend direction was established, movement was often swift and clear. Thus, being ready for either a breakout or breakdown in the coming days is essential. Create your live VT Markets account and start trading now.

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